SOLUTION: Pls answer my question Warren deposited his 12,000.00 in a local bank in 2019. If the bank offers 5% interest rate compounded annually, how much will be in his bank account in

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Question 1169273: Pls answer my question
Warren deposited his 12,000.00 in a local bank in 2019.
If the bank offers 5% interest rate compounded annually, how much will be in his bank account in 2028?
Suppose he will widthdraw the principal in 2028 and will leave the interest in his account, how much will the interest earn after 5 years?
Found 2 solutions by Boreal, Theo:
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
this is $12000(1+.05)^9=$18615.94,
withdraws $12,000 and has $6615.94 left. After 5 years compounded annually at 5% will have
$6615.94(1.05)^5=$8443.80
The interest will earn $1827.86 after 5 years

Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
the equation to use for this is f = p * (1 + r) ^ n
f is the future value
p is the present value
r is the interest rate per time period.
n is the number of time periods.

your time periods are in years.

when p = 12000 and r = 5% per year / 100 = .05 per year and n = 2028 - 2019 = 9 years, then the equation becomes:

f = 12000 * (1 + .05) ^ 9 = 18615.93859

round to the nearest penny = 18615.94

the interest earned is 6615.93859.

round to the nearest penny = 6615.94.

that becomes the present value and n becomes 5 and r stays at .05 per year.
the formula becomes:

f = 6615.93859 * (1 + .05) ^ 5 = 8443.800443.

round to the nearest penny to get 8443.80.

that's the interest after 5 years.

the additional interest earned is 8443.800443 minus 6615.93859 = 1827.861852.

round to the nearest penny to get additional interest earned = 1827.86.

your questions was how much will the interest earn after 5 years.

i believe the answer to that would be 1827.86.

a summary of what happened.

12000 grew to 18615.94 in 9 years.
interest earned was 18615.94 - 12000 = 6615.94
6615.94 grew to 8443.80 in 5 years.
interest earned was 8443.80 - 6615.94 = 1827.86